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Boeing, Airbus Face Fierce New Competition—from China

This undated photo made available on Monday, May 21, 2007 by Boeing Co. shows the first 787 Dreamliner sections on the final assembly line in Everett, Wash. (AP Photo/Boeing Co., Gail Hanusa)
Gail Hanusa
This undated photo made available on Monday, May 21, 2007 by Boeing Co. shows the first 787 Dreamliner sections on the final assembly line in Everett, Wash. (AP Photo/Boeing Co., Gail Hanusa)

While Boeing and its competitor, Airbus, are locked in a dogfight over passenger-jet domination, a third fledgling competitor—from China—will impact the fortunes of both corporations, industry watchers say.

“Boeing and Airbus need to pay attention, because the Chinese have a lot of money, the Chinese have a national will and the Chinese have a gargantuan domestic market,” Joseph C. Anselmo, senior business editor of Aviation Week, told CNBC.

The Chinese company Comac is aiming squarely at Boeing’s bestseller, the 737, with its C919, a narrow-bodied 190-passenger plane with 10 percent more fuel efficiency. The new plane is scheduled to take flight in 2014.

Boeing’s president and CEO James McNerney Jr. acknowledged the Chinese challenge. “The Chinese will be the long-term players that make an impact,” he said.

Boeing wants China to be its customer, not its competitor.

China’s C919 aircraft is only part of the giant nation's aviation plans. Over the next two decades, China’s market is expected to be second in size only to the combined market of the US and Canada.

But how much of a threat are the C919 and China? “It’s just a milestone; the Chinese are building world-scale medium-sized airplanes,” said aerospace consultant Wolfgang Demisch.

“It may not be the greatest, but it will be good enough to sell internationally on some scale. And the one after that is probably going to be much, much more competitive.”

Richard Aboulafia of the Teal Group Corporation agreed that Boeing and Airbus need to take China seriously, but his assessment of Chinese aviation products is less than stellar. “The ARAJ regional jet is nothing short of awful as a plane,” he said. “Everything that could go wrong with it does. I called it a ‘brick with wings.’ “

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